Director's Message
From the Fall 2008 Leadership Connection Newsletter
By Robert Letovsky, Ph.D.
Director, Graduate Administration and Management Programs
This past August, Prof. Paul Olsen and I accompanied a group of MSA students on a five-day tour of businesses and government agencies in the Canadian province of Ontario, Canada’s financial and manufacturing heartland. One of the highlights of the trip was the day we spent touring two examples of the factory of the future: The Magna International Karmax auto stamping facility in Milton, Ont., and Toyota’s Cambridge, Ont. Corolla/Lexus plant. Both factories are state-of-the-art facilities, with robots and information technology playing a prime role in daily operations. In fact, while the official head count at both facilities is large, each member of our group noticed how few people could be seen on the factory floor during our tours.
What does this level of automation mean for our society, our economy and ultimately our students? Much is said in the media about the decline of manufacturing in North America, particularly in the United States. In fact, according to data from Foreign Policy magazine, the United States’ share of global manufacturing output has remained fairly stable over the years, standing at 21.1 % in 2005 compared to 22.4 % in 1995. At the same time, it is true that almost five million manufacturing jobs have left the U.S. since the late 1970s. It’s important to realize that these losses have been concentrated in lower-skilled manufacturing jobs. Higher skilled jobs, defined as those with a median hourly wage of $24, increased by almost 40% between 1983 and 200 , to nearly 4.5 million, according to a 2006 study by the Federal Reserve Bank of New York. A 2007 survey of manufacturers conducted by Deloitte consultants showed that 80% of firms predicted a shortage of skilled workers through 2010. Particularly severe shortages were forecast for skilled welders, machinists and tool-and-die makers.
The automobile industry is an excellent case study of this change in the nature of manufacturing employment. Traditionally, the industry was known as one that did not value having educated people in its factories. This mindset has totally changed. As automobile manufacturers and their parts suppliers adopt increasingly sophisticated production technologies, they have been valuing workers who can learn new procedures, require less supervision and be proactive problem solvers. Our tours of the Magna and Toyota facilities confirmed this change: those workers we did see on the factory floor tended to be working in front of some type of computer, monitoring output and processes, rather than mechanically piecing together components from an assembly line. We saw several rooms devoted to team meeting areas, where key output and operations metrics were tracked and discussed by interdisciplinary worker teams.
The need for more skilled, educated workers in manufacturing has spread to other industries, including consumer electronics and pharmaceuticals. The “lean manufacturing” movement has even spread to the health care industry, with many hospitals actively seeking to hire people with factory experience to improve the quality of patient care. Often referred to as the Toyota Manufacturing Method, many hospitals have sought to adopt systems originally developed for the auto industry, based on the ideas of reducing defects and waste by increasing production cycles, reducing inventory holdings and operating on a “just in time” supplies inventory system. As several experts have noted, mistakes are much less common in well-run factories than hospitals. A top-performing factory, such as the two our group visited, would normally produce fewer than 10 defects per million. Many studies suggest medical errors are far more common. One article I have seen on this subject described how an executive with manufacturing experience had, upon joining a hospital in 2006, begun to follow nurses on their daily routines. He noticed that simply by moving supply cabinets closer to patient rooms, the hospital could reduce the amount of time nurses spent walking to retrieve supplies by almost 50%, dramatically increasing the time the nurses had for patient care.
I learned from our tours of these impressive facilities that manufacturing in North America is far from dead. It has however changed dramatically, and the premium is on educated, self-directed workers who are comfortable with technology, are capable of systems thinking and who can collaborate with others to solve problems and design new procedures. These kind of skills, while invaluable in the factory of today, are also critical in a wide range of business and nonprofit organizations. Our MSA program continues to stress these areas, to give our graduates as much flexibility as possible in a rapidly evolving job market.
Dr. Robert Letovsky, Director
Jeanmarie Hall 149
802.654.2477
Box 273
rletovsky@smcvt.edu
Dr. Paul Olsen, Associate Director
Jeanmarie Hall 169C
802.654.2661
Box 38
polsen@smcvt.edu